Goldman Sachs Backs 'Copper Tariff Trade' If Trump Slaps 25% Duty On US Imports

Goldman Sachs is eyeing a high-reward opportunity in copper that could pay off big if the U.S. follows through on its protectionist policy shift.

In a note published on Wednesday, Goldman Sachs analysts led by Eoin Dinsmore outlined a bullish view on what they are calling "The Copper Tariff Trade," a strategy built on the expectation of a potential import tax from the Trump Administration.

What's Happening With Copper Tariffs?

In February, the Trump Administration launched a formal investigation into copper imports under Section 232 — a process used to determine if certain imports pose a national security risk. It's the same move that led to tariffs on steel and aluminum years ago.

“For metals there is a stated and very real commitment to tariffs, which we believe they will deliver on,” Dinsmore wrote.

Goldman Sachs thinks copper is next in line. The bank says there's a 90% chance the U.S. will impose a 25% import tariff on foreign copper, possibly as soon as June. But right now, markets are acting like there's only a 60% chance of that happening.

That's where the trade opportunity comes in.

The Trade: Bet On COMEX Over LME Copper

Goldman says the market is underpricing this risk and suggests a tactical move: go long the December 2025 COMEX–London Metal Exchange copper arbitrage.

The trade Goldman likes is based on the price difference between copper traded in the U.S. – on COMEX – and globally, on the London Metal Exchange.

In simpler terms, bet that U.S. copper prices will jump relative to global ones if tariffs are put in place. Right now, U.S. copper for December delivery is trading $1,707 per metric ton higher than global prices — an 18% premium.

If a 25% tariff becomes reality, Goldman says that spread should widen to $2,287 per ton.

The United States Copper Index Fund CPER is the only U.S.-listed ETF that invests in COMEX copper futures, offering investors direct exposure to U.S. copper prices tied to domestic market dynamics.

How Fast Could Copper Tariffs Happen?

Goldman's base case assigns a 55% probability that the tariff will be announced by the end of June—just 125 days after the investigation began.

This expectation is supported by a March 26 press report suggesting tariffs could arrive "within weeks." Another scenario, with a 30% probability, pushes the decision to August or early September, based on a 180-day timeline used in previous investigations of critical minerals.

Regardless of the exact timing, the final decision must be made by December 2025, which is why Goldman favors the December COMEX-LME arbitrage trade.

How High Could Tariff Rate On Copper Go?

Goldman's model suggests a "fair" probability-weighted tariff of 22.5% on U.S. copper imports. That figure comes from assigning a 90% probability to a full 25% tariff and 10% to a no-tariff scenario.

Notably, the investment bank indicated that a middle-ground 10% tariff is "hard to rationalize," especially since copper was excluded from the baseline 10% tariffs already in effect.

Why Copper? National Security, Economic Policy, China's Dominance

The U.S. imports nearly 50% of the refined copper it uses — about 725,000 metric tons last year, worth around $7 billion. That's up from just 25% back in 2010.

Domestic copper production has dropped by 20% since 2010 due to high costs and tough regulations, while global production — mostly in China — has increased by 40%. So even as U.S. demand rises, more copper is coming from abroad, especially from countries like Chile, Peru and Canada.

“The Trump Administration believes the US’ reliance on copper imports leaves consuming sectors vulnerable to supply disruptions,” Goldman Sachs stated.

This worries policymakers. Copper is used in defense systems, power grids, electric vehicles, and even AI technology — all areas closely tied to national and economic security.

Could Tariffs Boost US Copper Output?

Goldman expects tariffs to encourage more investment in copper recycling and might help restart idle smelters and refineries. It could also reduce demand for copper exports by making them pricier overseas.

The bigger shift could come from Washington's push to fast-track mining permits. If that goes through, U.S. copper mine production could get a real lift, yet not until the early 2030s.

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